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Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince
Edition 8ISBN: 978-1259129858Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince
Edition 8ISBN: 978-1259129858 Exercise 25
The elasticity of demand for a firm's product is -2.5 and its advertising elasticity of demand is 0.2.
a. Determine the firm's optimal advertising-to-sales ratio.
b. If the firm's revenues are $40,000, what is its profit-maximizing level of advertising?
a. Determine the firm's optimal advertising-to-sales ratio.
b. If the firm's revenues are $40,000, what is its profit-maximizing level of advertising?
Explanation
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The own-price elasticity of demand for f...
Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince
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